ANALYSIS: Honda Commences Car Production In Nigeria. A MUST READ!!

Accord Sedan

Honda new CEO, Takahiro Hachigo made the announcement yesterday, 6 July 2015 at a news conference in Japan that the company has commence the production of Honda cars in Nigeria. It's old motorcycles plant was retooled for the production. 

The Japanese auto giant is projecting the production of 1,000 Accord Sedan (picture above) yearly.

Don't get excited yet. Honda didn't say whether the car components will be locally manufactured in Nigeria, I strongly doubt this will be the case anyway. 

If our electricity was in good shape and all the car components are locally manufactured, automatically overhead will be significantly low, this way we can expect the cars to be reasonably cheap, but this will not be case.

As it stands right now, firstly, Honda is more likely to import all the car's components then assemble it in Nigeria like Innoson Motors. Overhead will still be high this is why Innoson vehicles are very expensive and why average Nigerians don't own it.

Even though the imported components will enjoy custom charges waiver, prices are still going to be high because of excessive cost of energy (plant. diesel & petrol), overpriced operational cost, and cost of domestic and international logistics. 

Other than few jobs that will be created Nigerians at large doesn't stand a chance to benefit from this. More than 70% of Nigerians will not be able to pay for this cars outright, and there is no efficient hire purchase scheme in Nigeria to turn to. Honda identify with this problem too that's why production units is set at 1,000 yearly.